Citizens JMP Maintains Hold Rating for LegalZoom Amid Insider Sentiment Shift

Citizens JMP analyst Matthew Condon reiterated a Hold rating on LegalZoom, with shares closing at $10.73. Condon is a 2-star analyst with a 45.45% success rate and an average return of 0.7%. LegalZoom's market cap is $1.89B and has a P/E ratio of 65.87. Corporate insider sentiment is negative, with 37 insiders selling shares over the past quarter.

LegalZoom Inc. (LZ) reported its second-quarter 2025 earnings, revealing robust financial performance that exceeded revenue forecasts but resulted in a mixed market reaction. The company's earnings per share (EPS) of 0.15 USD met analyst expectations, while revenue of 192.5 million USD exceeded the forecasted 182.72 million USD by 5.35% [1]. Subscription revenue grew by 10%, highlighting a shift towards recurring income, and adjusted EBITDA increased by 35%, improving operational efficiency [1].

Despite these strong financial results, LegalZoom's stock fell 2.22% to 8.37 USD in aftermarket trading, indicating mixed investor sentiment. This decline could be attributed to future guidance or broader market conditions, as the stock has shown resilience with a 43.32% return over the past year [1]. Analysts have set targets ranging from $8 to $12 per share, with a current market cap of $1.89B and a P/E ratio of 65.87 [2].

Citizens JMP analyst Matthew Condon reiterated a Hold rating on LegalZoom, with shares closing at $10.73. Condon is a 2-star analyst with a 45.45% success rate and an average return of 0.7% [2]. Corporate insider sentiment is negative, with 37 insiders selling shares over the past quarter [2].

LegalZoom's strategic shift towards subscription-based services, now contributing over 60% of its revenue, has positioned the company as a market leader in online legal services [1]. The company raised its full-year revenue guidance to reflect 8% growth, maintaining an adjusted EBITDA margin target of 23% [1]. For Q3, LegalZoom anticipates revenue between 182 and 184 million USD and adjusted EBITDA in the range of 44 to 46 million USD, underscoring continued confidence in its strategic initiatives [1].

However, LegalZoom faces challenges such as volatile business formation trends, shifts towards subscription models, broader economic conditions, and technological advancements requiring ongoing investment and adaptation [1]. The company's AI partnerships and recent acquisition of Formation Nation are key strategies for market expansion and reducing customer churn [1].

References:
[1] https://www.investing.com/news/transcripts/earnings-call-transcript-legalzoom-q2-2025-revenue-beats-forecast-stock-dips-93CH-4179369
[2] https://www.citizens.com/analysts/matthew-condon